We expect robust capex growth to resume once U.S. businesses get more clarity around trade.
Month: November 2018
Third quarter earnings season was again very impressive, with S&P 500 Index earnings growing 28% year over year, the fastest pace since the fourth quarter of 2010.
Upgraded our view of mortgage-backed securities (MBS) from neutral to neutral/positive; Downgraded our view of bank loans to neutral from neutral/positive.
We still believe trade’s economic impact will be limited, but the indirect consequences should be monitored.
Getting past the midterm election removes uncertainty and enables investors to focus on fundamentals, which we believe can be positive for stocks.
Overall, October’s economic reports reflected solid U.S. economic growth and manageable inflationary pressures.
When it comes to elections, the markets seem to seek clarity above all else; yet there are some policy implications to consider. We break down the 2018 midterm elections in this latest Client Letter.
We believe wage growth (and labor costs) will remain manageable amid the Fed’s gradual approach and changing labor market dynamics.
Within the four-year presidential cycle, this quarter and the following two quarters next year are historically the best for stocks.